Income Tax Officer Ward-5(2)(4), Bangalore V. M/s The Karnataka State Apex Bank Employee Co-operative Society Ltd , Bangalore

ITA 1481/BANG/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5395 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 23-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L V BHASKAR REDDY
• Section: 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 1481 / BANG/201 7 ASSESSMENT YEAR : 20 13 - 14 THE INCOME TAX OFFICER, WARD 5 (2) (4), BANGALORE. VS. M/S. THE KARNATAKA STATE APEX BANK EMPLOYEE CO-OPERATIVE SOCIETY LTD., NO. 1, APEX BANK BUILDING, PAMPA MAHAKAVI ROAD, CHAMARAJPET, BANGALORE 560 018. PAN: AAAAK2843E APPELLANT RESPONDENT APPELLANT BY : SHRI L.V. BHASKAR REDDY, ADDL. CIT (DR) RESPONDENT BY : SHRI SANDEEP, CA DATE OF HEARING : 2 1 . 0 3 .2018 DATE OF PRONOUNCEMENT : 23 . 0 3 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE REVENUE WHICH IS DIRECT ED AGAINST THE ORDER OF LD. CIT (A)-5, BANGALORE DATED 22.03.2017 FOR ASSESSMENT YE AR 2013-14. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER. 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPE ALS)-5, BANGALORE, IS OPPOSED TO THE LAW AND NOT ON THE FAC TS AND CIRCUMSTANCES OF THE CASE. 2. WHETHER THE LD.CIT(A) IS JUSTIFIED IN NOT APPREC IATING THE FACT THAT THE ASSESSEE SOCIETY IS CARRYING ON THE BANKING BUS INESS. 3. WHETHER ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A ) WAS RIGHT IN HOLDING THAT THE ASSESSE SOCIETY IS NOT A COOPERATIVE BANK IGNORING THE FACT THAT THE NATURE OF ITS BUSINESS AND FUNCTIONING HAS ALL THE TRAPPINGS AND ATTRIBUTES OF A BANK. 4. WHETHER ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) WAS RIGHT IN HOLDING THAT THE ASSESSE SOCIETY IS N OT A ITA NO.1481/BANG/2017 PAGE 2 OF 3 COOPERATIVE BANK IGNORING THE FACT OF INSERTION OF CLAUSE (VIIA) IN SECTION 2(24) OF THE INCOME TAX ACT,1961 BY THE FIN ANCE ACT,2006. 5. WHETHER ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) WAS RIGHT IN IN HOLDING THAT THE ASSESSE IS ELIGIB LE FOR DEDUCTION OF U/S 80P(2) IGNORING THE FACT THAT WITH EFFECT FROM 01.04.20007, SUBSECTION (4) OF SECTION 80P PROVIDES THAT THE PROVISIONS OF SECTION 80P SHALL NOT APPLY IN RELATI ON TO ANY CO- OPERATIVE BANK OTHER THAN PRIMARY AGRICULTURAL CRED IT SOCIETY OR PRIMARY COOPERATIVE AGRICULTURAL AND RURAL DEVELOPM ENT BANK. 6. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED UP ON, THE ORDER OF THE CIT(A) MAY BE REVERSED AND THAT ASSESSMENT ORDE R BE RESTORED. 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OTHER GROUNDS ON OR BEFORE HEARING OF THE APPEAL. 3. IT WAS SUBMITTED BY LD. DR OF REVENUE THAT IN TH E PRESENT CASE, THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF THE CITI ZEN CO-OPERATIVE SOCIETY LTD. VS. ACIT AS REPORTED IN 397 ITR 1 IS APPLICABL E AND THEREFORE, ORDER OF CIT(A) SHOULD BE REVERSED AND THAT OF AO SHOULD BE RESTORED. AS AGAINST THIS, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT AS PER PARA 24 OF THE SAME JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF THE CITIZEN CO- OPERATIVE SOCIETY LTD. VS. ACIT (SUPRA), THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. HE DRAWN MY ATTENTION TO PARA 24 OF THE JUDGMENT AND POINTED OUT THAT AS PER THIS PARA OF THE JUDGMENT, IT WAS HELD BY HONBLE APEX COURT THAT IN ORDER TO DO THE BUSINESS OF A CO-OPERATIVE BANK, IT IS IMPERATIVE TO HAVE A LICENCE FROM THE RESERVE BANK OF INDIA AND THEREFOR E, THE BUSINESS OF THE ASSESSEE DOES NOT AMOUNT TO THAT OF A CO-OPERATIVE BANK AND HENCE IT WILL NOT COME WITHIN THE MISCHIEF OF SUB-SECTION (4) OF SECT ION 80P OF THE IT ACT. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL I REPRODUCE PARA 24 OF THIS JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF THE CITIZEN CO- OPERATIVE SOCIETY LTD. VS. ACIT (SUPRA). THE SAME READS AS UNDER. 24) UNDOUBTEDLY, IF ONE HAS TO GO BY THE AFORESAID DEFINITION OF CO- OPERATIVE BANK, THE APPELLANT DOES NOT GET COVERED THEREBY. IT IS ALSO A MATTER OF COMMON KNOWLEDGE THAT IN ORDER TO DO TH E BUSINESS OF A CO-OPERATIVE BANK, IT IS IMPERATIVE TO HAVE A LICEN CE FROM THE RESERVE BANK OF INDIA, WHICH THE APPELLANT DOES NOT POSSESS . NOT ONLY THIS, AS NOTICED ABOVE, THE RESERVE BANK OF INDIA HAS ITSELF CLARIFIED THAT THE ITA NO.1481/BANG/2017 PAGE 3 OF 3 BUSINESS OF THE APPELLANT DOES NOT AMOUNT TO THAT O F A CO-OPERATIVE BANK. THE APPELLANT, THEREFORE, WOULD NOT COME WITH IN THE MISCHIEF OF SUB-SECTION (4) OF SECTION 80P. 5. I ALSO FIND THAT ON PAGE NO. 7 OF THE ASSESSMENT ORDER, IT IS NOTED BY THE AO THAT THE ASSESSEE IS A CO-OPERATIVE BANK BEING A PRIMARY CO-OPERATIVE BANK AS PER SECTION 56 R.W.S. 5 OF THE BANKING REGULATION ACT, 1949, WHICH DEFINES CO- OPERATIVE BANK. BUT THIS IS NOT THE CASE OF THE AO THAT THE ASSESSEE IS HAVING A LICENCE FROM RESERVE BANK OF INDIA TO DO BANKING BU SINESS AND THEREFORE, AS PER THIS JUDGMENT OF HONBLE APEX COURT OF WHICH PA RA 24 IS REPRODUCED ABOVE, IT CANNOT BE SAID THAT ASSESSEE IS A CO-OPERATIVE B ANK AND HENCE, I FIND NO REASON TO INTERFERE IN THE ORDER OF CIT(A). 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 23 RD MARCH, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.